Harvey Norman Posts Big Sales Increase
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Mass market retailer Harvey Norman has reported a big jump in sales of 18.1% in the first quarter of the 2006/07 financial year. Revenues were $1.25 billion. As a result of the positive announcement Harvey Norman shares climbed 5.2% in early trading.Net income rose to 97.7 million Australian dollars, or $73 million, in the six months ended June 30 from 79.4 million dollars a year earlier. The company posted an annual result of 229.6 million dollars in net profit.

The executive chairman of Harvey Norman, Gerry Harvey, is opening new stores and buying rivals to tap rising demand for iPods and Xbox 360 game consoles and to limit the impact on consumer spending of rising fuel and borrowing costs that have curbed furniture sales. Harvey Norman owns the property for 80 of its 216 stores, allowing it to control rents and benefit from rising land values.
“The integrated retail and property strategy continues to be a successful formula,” Gerry Harvey said in a statement. “There are nine new stores planned to open and three relocations of existing stores.”
Gerry Harvey, whose wife Katie Page has been managing director for more than seven years, controls about 30 percent of Harvey Norman stock and has a personal fortune of about 1.5 billion dollars, according to BRW Magazine’s annual Rich List.
Earnings before interest, tax, depreciation and amortization from franchising, where Harvey Norman gets 85 percent of its sales, rose 7.4 percent to 250.4 million dollars for the full year, lifted by the new store openings.
At company-controlled outlets, including overseas stores, annual earnings rose 27 percent to 115 million dollars on rising sales of notebook computers, while revenue from portable media players doubled. Harvey Norman opened 16 new stores during the past year.